Q2 2026 Domino's Pizza Group PLC Earnings Call - Q&A

August 4, 2026

Nicola Frampton: Are we set? Yeah. Happy to go. Thank you, Enrica. Good morning, everyone, and thank you very much for joining us here this morning. Before I ask Michael to host the Q&A, I just really wanted to say Domino's is an exceptional business with a really strong brand, really strong franchisee partnerships. We've got brilliant service to our customers and a supply chain to die for. I'm really encouraged by the performance that we've seen in H1. I think it's incredibly strong. I do want to say that we intend to be disciplined, value-led, and focused on execution going forward. We're confident in our FY26 expectations. We're staying alert to what's going on around the consumer and cost pressures, but we feel very confident that we're sitting on a very strong, healthy, and confident business right now.

Nicola Frampton: Are we set? Yeah. Happy to go. Thank you, Enrica. Good morning, everyone, and thank you very much for joining us here this morning. Before I ask Michael to host the Q&A, I just really wanted to say Domino's is an exceptional business with a really strong brand, really strong franchisee partnerships. We've got brilliant service to our customers and a supply chain to die for. I'm really encouraged by the performance that we've seen in H1. I think it's incredibly strong. I do want to say that we intend to be disciplined, value-led, and focused on execution going forward. We're confident in our FY 2026 expectations. We're staying alert to what's going on around the consumer and cost pressures, but we feel very confident that we're sitting on a very strong, healthy, and confident business right now.

Speaker #1: So we set? Yeah? Happy to go. Thank you, Enrique. Good morning, everyone. Thank you very much for joining us here this morning. Before I ask Michael to host the Q&A, I just really wanted to say Domino's is an exceptional business with a really strong brand.

Speaker #1: Really strong franchisee partnerships. We've got, you know, brilliant service to our customers and a supply chain to die for. And I'm really encouraged by the performance that we've seen in half one, and I think it's, you know, incredibly strong.

Speaker #1: But I do want to say that we intend to be disciplined, value-led, and focused on execution going forward. So, you know, we're confident in our FY26 expectations. We're staying alert to what's going on around the consumer and cost pressures, but we feel very confident that we're sitting on a very strong, healthy, and confident business right now.

Speaker #1: So, on that note, Michael, may I hand over to your good self?

Nicola Frampton: On that note, Michael, may I hand over to your good self?

Speaker #2: No problem. Okay, good morning Dr. Jack, it feels—

[Analyst] (Numis): Okay. Good morning. Dr. Jacky Philhub. I've got three questions, if that's okay. First one would be in terms of like-for-like sales, perhaps the possible impact of the World Cup. In terms of cheese versus pizza, what's been driving the like-for-like sales, that's the first one. The second one is if you could just expand a little bit on franchisee profitability and the trend going on in there. The last one would be on, in terms of other projects you're looking at in terms of automation or anything else, if you can give us an indication of what they are, and then any possible impact they might have.

Douglas Jack: Okay. Good morning. Douglas Jack, Peel Hunt. I've got three questions, if that's okay. First one would be in terms of like-for-like sales, perhaps the possible impact of the World Cup. In terms of cheese versus pizza, what's been driving the like-for-like sales, that's the first one. The second one is if you could just expand a little bit on franchisee profitability and the trend going on in there. The last one would be on, in terms of other projects you're looking at in terms of automation or anything else, if you can give us an indication of what they are, and then any possible impact they might have.

Speaker #3: I've got 3 questions, if that's okay. First one would be, in terms of like for like sales, perhaps the possible impact of the World Cup and, you know, in terms of cheese versus pizza, you know, what's been driving the like for like sales, that's that's the first one.

Speaker #3: The second one is, if you could just expand a little bit on franchisee profitability and the trend going on in there. And the last one would be, in terms of other projects you're looking at in terms of automation or anything else, if you can give us an indication of what they are, and then any possible impact they might have.

Speaker #1: Okay. I think you meant cheese, not chicken. Did you?

Nicola Frampton: Okay. I think you meant chicken, not cheese, did you?

Speaker #2: No, I said cheese.

Ross Broadfoot: He said cheese.

Michael Barker: He said cheese.

Nicola Frampton: Cheese versus pizza. Chicken versus pizza. Okay. Not a problem. Look, we had a very good H1 in terms of system sales and as you saw, some strong like for likes, which is a really welcome thing for us to see and I think it's a reflection of multiple things, Doug. The performance that we've seen was flattered a little bit by World Cup. It was a welcome tailwind and something that was always something that was going to happen to Domino's as we're a big brand, and we participate in the national conversations around football, and we're front of mind for group gatherings and social occasions. There's no doubt it would've had some impact.

Speaker #1: Cheese versus pizza, chicken versus pizza, okay. Not a problem. Look, we, you know, we had a very, very good half warn in terms of system sales, and, you know, as you saw, some strong like for likes, which is a really welcome thing for us to see.

Speaker #1: And, you know, I think as a reflection of multiple things, Doug, the performance that we've seen would have been—was flattered a little bit by World Cup.

Speaker #1: It was a welcome tailwind and something that, you know, was always something that was going to happen to Domino's, as we're a big brand and we participate in the national conversations around football, and we're front of mind for group gatherings and social occasions.

Speaker #1: So there's no doubt it would have had some impact, but we've seen, obviously, we have the benefit of seeing the results month after month after month by period, and our like-for-likes have been in positive every month of the year, not just through the World Cup.

Nicola Frampton: Obviously, we have the benefit of seeing the results month after month by period, and our like for likes have been in positive every month of the year, not just through the World Cup. I think the next part of your question really is, well, how does that break down between chicken and pizza sales? It's pretty balanced, actually. We've seen growth in pizza, and we've seen growth in chicken, as you would expect, given that we launched chicken in February. That is something that we expected to see. It's early days with chicken in terms of the long-term read, but it's certainly made a contribution. What chicken has also done for us effectively is it's actually flattered pizza sales. It hasn't cannibalized it, and I think that's also important.

Speaker #1: So, I think the next part of your question really is, well, how does that break down between chicken and pizza sales? And it's pretty balanced, actually.

Speaker #1: We've seen growth in pizza, and we've seen growth in chicken, as you would expect given that, you know, we launched chicken in February. That is something we expected to see.

Speaker #1: It's early days with chicken in terms of the long-term read, but it's certainly made a contribution. What chicken has also done, effectively, is it's actually flattered pizza sales.

Speaker #1: It hasn't cannibalized it, and I think that's also important. So, you know, a good number of our orders for chicken actually then have incremental pizzas added to the order on top.

Nicola Frampton: A good number of our orders for chicken actually then have incremental pizzas added to the order on top. In those scenarios, for the most case, the ticket is higher because effectively you've got a bigger basket size, which I think probably plays to the wider appeal in the family that we now offer multiple choices that can still be delivered under our fantastic service model. All in all, it's pretty balanced. As I said, the positive like for likes have been with us really from the start of the year. We've had some little bit of help from the World Cup, but it's not been material to the numbers that we've been reporting.

Speaker #1: And in those scenarios, for the most case, the ticket is higher because effectively you've you've got a bigger basket size, which I think probably plays to the the, you know, the the wider appeal in the family that we now offer a, you know, multiple choices that can still be delivered under our fantastic service model.

Speaker #1: So, all in all, it's pretty balanced. As I said, the positive like-for-likes have been with us really from the start of the year.

Speaker #1: So, we've had a little bit of help from the World Cup, but it's not been material to the numbers that we've been reporting.

Speaker #2: Yeah.

Speaker #3: And what I would add to that is, importantly, that if we use orders as a proxy for volume, the volume-value equation has held up well.

Andrew Andrea: What I would add to that is importantly, that if we use orders as a proxy for volume, the volume value equation's held up well. We are selling more product. If you use orders as a proxy for volume, and the delta as a proxy for price, for the 2% growth driven by volume at about 3% truly inflation on price.

Speaker #3: We are selling more product, so if you use orders as a proxy for volume, and the delta as a proxy for price, we've got 2% growth driven by volume at about 3%, truly inflation on price.

Speaker #1: Yep. Thank you. Doug, your second question was about franchisee profitability. We've seen an improving trend in terms of franchisee profitability versus '24 and '25, which is really good to see.

Nicola Frampton: Yep. Thank you. Doug, your second question was about franchisee profitability. We've seen an improving trend in terms of franchisee profitability versus 2024 and 2025, which is really good to see. The franchisees are very behind our strategy to focus on the core because they can see that benefits the business and benefits their businesses. Really, where we've aligned probably over the last six months or so is that if we focus on growing the pie, then we all benefit. Our sales are up, their sales and profitability are also on an improving trend and up. I had a call with them at 8:00 AM this morning to share that, and I think we're in a good place.

Speaker #1: The franchisees are very behind our strategy to focus on the core because, you know, they can see that that benefits the business and benefits their businesses.

Speaker #1: And and really, where we've aligned probably over the last 6 months or so is that if we focus on growing the pie, then we all benefit.

Speaker #1: So, you know, our sales are up. Their sales and profitability are also on an improving trend and up. I had a call with them at 8 o'clock this morning to share that.

Speaker #1: And, you know, I think we're in a good place. Other projects—sorry, you did say three questions. I can't count beyond two, Doug. Sorry.

[Analyst] (Numis): Other projects.

Douglas Jack: Other projects.

Nicola Frampton: Other projects. Sorry, you did say three questions. I can't be on two, Doug. Sorry. Other projects. The sort of projects that we're looking at really are in supply chain. They're all about warehouse automation. Principally, we've got opportunities to take I'm just going to go to the end of here because there's a couple of things I wanted to look at. We've got an upgrade to one of our sites that will effectively remove a full afternoon shift. Brings down some of the labor costs in that area. On the back of the SCC 5 opening, we're able to reroute some of the deliveries that typically came from Milton Keynes. That's also enabling certain deliveries to areas like the Southwest to be fulfilled by 1 driver rather than 2 because the hours of the journey are substantially lower.

Speaker #1: Other projects. So, the sort of projects that we're looking at really are in supply chain—they're all about warehouse automation. Principally, we've got opportunities to take—and I'm just going to go to the end of here because there are a couple of things I want to look at.

Speaker #1: We've got an upgrade to one of our sites that will effectively remove a full afternoon shift. It brings down some of the labor costs in that area.

Speaker #1: On the back of the SCC 5 opening, we're able to reroute some of the deliveries that typically came from Milton Keynes. That's also enabling certain deliveries to areas like the Southwest to be fulfilled by one driver rather than two, because the hours of the journey are substantially lower.

Speaker #1: So that's another benefit in terms of removal of FTE time, and that's probably one of the most expensive lines in the supply chain cost base.

Nicola Frampton: That's another benefit in terms of removal of FTE time, and that's probably one of the most expensive lines in the supply chain cost base. We've got some production automation around dough and also some sort of warehouse packing automation across various sites. All in all, we've removed quite a number of FTE roles already. They should start as, I think Andrew's already indicated, start to flow through into our H2. Again, as we've said, there's potentially more to come as more of these projects are actually put into play. That's a big focus for us.

Speaker #1: We've then got some production automation around dough, and also some sort of warehouse packing automation across various sites. So, all in all, we've removed quite a number of FTE roles already.

Speaker #1: They should start, as I think Andrew has already indicated, to flow through into our second half. But, you know, again, as we've said, there's potentially more to come as more of these projects are actually put into play.

Speaker #1: And that's a big focus for us.

Speaker #3: Wait. Hi, Ross Broad from RBC. Three, please. The first one: the loyalty scheme. It was obviously in trial for a while, but what changed and evolved, and what's given you the confidence to launch it fully in Q4?

Ross Broadfoot: Mike. Hi, Ross Broadfoot from RBC. Three, please. The first one, the loyalty scheme. It was obviously in trial for a while. What changed and evolved and what's given you the confidence to launch it fully in Q4? The second just on chicken, sort of where are we in terms of the customer awareness of that proposition? Have we reached a stage now where people know and they need to buy, or people are still learning about the change in the menu? Thirdly, could you just give us an update on plans for the rollout now versus sort of previous management guidance or expectations? Thank you.

Speaker #3: The second, just on chicken—sort of, where are we in terms of the customer awareness of that proposition? Have we reached the stage now where people know and they need to buy, or are people still learning about the sort of, the change in the menu?

Speaker #3: And then, thirdly, could you just give us an update on plans for the rollout now versus previous management guidance or expectations?

Speaker #3: Thank you.

Speaker #1: So I'll start with loyalty. Certainly, you know, we have a loyalty program already up and running. We have 2.2 million customers. The big opportunity within loyalty that we see is a growth in frequency.

Nicola Frampton: I'll start with loyalty. Certainly, we have a loyalty program already up and running with 2.2 million customers. The big opportunity within loyalty that we see is a growth in frequency. We've spent quite a lot of time really analyzing what the customer behavior is in our existing loyalty program in order to build that into the new one. We'll be looking at KPIs such as frequency, customer retention, how they're actually ordering with us, their lifetime values. We've been working on the timing of the transition to the new project because we've wanted to make sure we've built in learnings from the current program and also learnings from some of our other markets who also operate loyalty programs, because it's quite important to franchisee economics to get loyalty right, not just for the customer, but also for the franchisees. We're partnering with Open Loyalty.

Speaker #1: So we've spent, you know, quite a lot of time really analyzing what the customer behavior is in our existing loyalty program in order to build that into the new— the new one.

Speaker #1: So, you know, we'll be looking at KPIs such as frequency, customer retention, how they're actually ordering with us, and their lifetime values.

Speaker #1: We've been working on the timing of the transition to the new project because, you know, we've wanted to make sure we've built in learnings from, you know, the current program and also learnings from some of our other markets.

Speaker #1: So, also, operate loyalty programs because it's quite important to franchisee economics to get loyalty right—not just for the customer, but also for the franchisees.

Speaker #1: So, you know, we are working—we're partnering with Open Loyalty. They're a proven third-party loyalty program operator. We've got everything pretty much ready to go, and we're confident that we will launch the full scheme towards the back end of this year.

Nicola Frampton: They're a proven third-party loyalty program operator. We've got everything pretty much ready to go, we're confident that we will launch the full scheme towards the back end of this year. In principle, what loyalty will do for us when we move to the new platform, obviously it will continue the work that we're doing already on ensuring that our loyal customer base, our champion customers, et cetera, in our core base, are retained. I say we've got 2.2 million customers, but there are 12 million on there that we actually would much rather have as part of the loyalty base. Now that we've got a base of 14 million, if we can get some of the ones that are coming to us through aggregators onto that platform through loyalty, that would be a big win.

Speaker #1: In principally, what loyalty will do for us with when we move to the new platform, obviously, it will continue the the work that we're doing already on ensuring that our loyal customer base, our champion customers, etc., in in our core base are retained.

Speaker #1: We've only been able to, I say, you know, we've got 2.2 million customers, but there are 12 million on there that we actually would much rather have as part of the loyalty base.

Speaker #1: And actually, we've got a base of 14 million. If we can get some of the ones that are coming to us through aggregators onto that platform through loyalty, that would be a big win, because you know, having the scale to operate a loyalty program across the big the the full database will, again, if you think about our odd average orders being 4 and a half times a year, 1 more order from a chunk of that database is a is a massive growth opportunity for us full stop.

Nicola Frampton: Having the scale to operate a loyalty program across the full database will, again, if you think about our average orders being four and a half times a year, one more order from a chunk of that database is a massive growth opportunity for us, full stop. Loyalty in itself doesn't drive that. You've got to have the product, and that's where the chicken comes back into play as another occasion and food opportunity. That is one part of the opportunity, and I'm confident it will work because we've done so much work on the core program. The additional functionality, though, gives us two more opportunities. Firstly, it gives us a much deeper personalization CRM opportunity.

Speaker #1: And then, you know, loyalty in itself doesn't drive that. You've got to have the product, and that's where, you know, the chicken comes back into play as, you know, another occasion and food opportunity.

Speaker #1: So that is one part of the opportunity, and I'm confident it will work because we've done so much work on the core program.

Speaker #1: The additional functionality, though, gives us two more opportunities. Firstly, it gives us a much deeper personalization CRM opportunity. At the moment, it is quite a basic scheme in terms of, you know, five stamps and it's a free pizza, whereas the new program will enable us to reward different behaviors, to promote different products, to potentially use it to bring some of our new product launches to life through the loyalty program.

Nicola Frampton: At the moment, it is quite a basic scheme in terms of five stamps and it's a free pizza, whereas the new program will enable us to reward different behaviors, to promote different products, to potentially use it to bring some of our new product launches to life through the loyalty program. What it will also enable us to do is effectively recruit new customers direct to the loyalty program. At the minute, you can only be invited to loyalty when you're a customer within Domino's. The new solution effectively allows us to invite potential customers, so people that are not currently with Domino's. I think when you take all that in the round, I'm very confident we'll be launching it back end of this year. There's a lot more functionality and capability coming through from it.

Speaker #1: And what it will also enable us to do is effectively recruit new customers directly to the loyalty program. At the minute, you can only be invited to loyalty when you're a customer within Domino's.

Speaker #1: The new solution effectively allows us to invite customers who are, you know, potential customers—people that are not currently with Domino's.

Speaker #1: So I think when you take all that in, in the round, I'm very confident we'll be launching it at the back end of this year.

Speaker #1: There's a lot more functionality and capability coming through from it. We've spent a lot of time making sure that, you know, we're delivering what we need for customers, and we're delivering what we need for the franchisees who will operate the program.

Nicola Frampton: We've spent a lot of time making sure that we're delivering what we need for customers and we're delivering what we need for the franchisees who will operate the program. So yeah. Now, what was the second question?

Speaker #1: And so, yeah. Now, what was the second question?

Speaker #3: Chicken. Chicken. Chicken and customer awareness.

Ross Broadfoot: Chicken and customer awareness.

Speaker #1: Chicken. Chicken.

Nicola Frampton: Chicken.

Speaker #3: What's the customer awareness? Do we think there's more to go?

Ross Broadfoot: What's the customer awareness? Do we think there's more to go?

Nicola Frampton: It's a good question. I think there is a good level of customer awareness. I don't have the exact numbers actually, on terms of the numbers of customers that have tried it, but it's mixing really well. We've seen the mix increase. I probably would like to come back with a little bit more detail on that a little bit further on, because again, going back to what I said before about repeat occasions, we launched in February. It's still early for us to say exactly what the awareness looks like. I think, I wish I could remember what the percentage was, but the team has shown me it's actually quite a high percentage of awareness already. Actually, the customers who have tried it are sort of saying 80% are what we call highly satisfied in terms of with the product and the experience that they've had.

Speaker #1: It's a good question. I think there's there is a good level of customer awareness. I think I I don't have the exact numbers, actually, on on terms of the numbers of customers that have tried it, but it's mixing really well.

Speaker #1: We've seen the mix increase. I'd probably like to come back with a little bit more detail on that a little bit further on because, again, going back to what you said before about repeat occasions—we launched in February.

Speaker #1: It's still early for us to say exactly what the awareness looks like. But, you know, I I think there's a I wish I could remember what the percentage was, but the team the team assured me that it's actually quite a high percentage of awareness already.

Speaker #1: And actually, the customers who have tried it are sort of saying 80% of what we call highly satisfied in terms of, you know, with the product and the experience that they've had.

Speaker #1: So, again, that's really encouraging from that point of view. And the—

Nicola Frampton: Again, that's really encouraging from that point of view. The final question.

Speaker #3: Is that rollout the rollout of chicken, or is it rollout generally? Of stores? Rollout of stores.

Ross Broadfoot: What's that rollout, is that rollout of chicken or rollout generally of stores? Rollout of stores.

Nicola Frampton: Oh, the rollout plan. Okay. Fine. I'm with you now. Yeah. The economics on new stores are challenged probably more than they ever have been in terms of just the costs that our franchisees are bearing, particularly around labor. Although I answered the question, Doug's earlier, around franchisee profitability, if you look at where we were in 2022/23, it's not a stellar growth performance from their point of view. That is not through anything that the business has done from a trading point of view. It literally has been the layering up of multiple costs and taxations and what have you into their businesses. For that reason, we're choosing to focus. We've got more than 1,400 stores open already.

Speaker #1: Oh, the rollout plan. Okay. Fine. I'm with you now. Yeah. So the focus the the economics on new stores are a challenged probably more than they ever have been in terms of just the the the costs that our franchisees are bearing, particularly around around labor.

Speaker #1: You know, and although I answered the question at Doug's earlier around franchisee profitability, if you look at where we were in 2022 and 2023, it's not a stellar growth performance from their point of view.

Speaker #1: And that is not through anything that the business has done from a trading point of view. It literally has been the layering up of multiple costs and taxations, and what have you, into their businesses.

Speaker #1: So for that reason, we're choosing to focus we've got 1,400 more than 1,400 stores open already. I think by focusing on improving their profitability, focusing on growing like-for-likes and the sort of results that we're talking about today, effectively, that is the right engine and the right focus for us to think about what does that mean for the for the white space going forward.

Nicola Frampton: I think by focusing on improving their profitability, focusing on growing like for likes and the sort of results that we're talking about today, effectively, that is the right engine and the right focus for us to think about what does that mean for the white space going forward. Clearly, the stronger the like-for-likes, the stronger the sales, and the stronger the average store EBITDA, the more the remaining white space in the UK lends itself to another store opening. That being said, we've got 11 stores open this year to date. That is probably where we were last year, to be fair of. I'm not signaling that there's anything to worry about. What I am signaling is from our point of view, I think pressuring franchisees to open stores that don't make sense just to hit a store count number is not a good business.

Speaker #1: Because clearly, the stronger the like-for-likes, the stronger the sales and the stronger the average store EBITDA, the more the remaining white space in the UK lends itself to another store opening.

Speaker #1: That being said, we've got 11 stores open this year to date. That is probably where we were last year, to be fair of us.

Speaker #1: So, you know, I'm not—I'm not signaling that there's anything to worry about. What I am signaling is, from our point of view, I think pressuring franchisees to open stores that don't make sense, just to hit a store count number, is not a good business.

Speaker #1: And so, it's not something that we as a team are going to be focusing on with you guys going forward. The focus needs to be on sales.

Nicola Frampton: It's not something that we as a team are going to be focusing on with you guys going forward. The focus needs to be on sales. Franchisees will absolutely open stores when it makes sense to do so, as demonstrated by the 11 that have opened this year to date.

Speaker #1: And, you know, franchisees will absolutely open stores when it makes sense to do so, as demonstrated by the 11 that have opened this year to date.

Speaker #3: I think philosophically, historically, I think the the the pace of store openings has been seen as the cake of the business. We've built in, you know, the last 2 or 3 months a very tight integrated business plan with a few key levers that Nicholas set out in her in her presentation.

Andrew Andrea: I think philosophically, historically, I think the pace of store openings has been seen as the cake of the business. We've built in the last two or three months, a very tight, integrated business plan with a few key levers that Nicola set out in her presentation. The store openings become the icing rather than the cake. Our growth is predicated on improved performance out of the units that we've got, the return on capital on the investments either from us or our franchisees. That's where real success comes from. If we can accelerate stores with the right economics, that's a layer on top rather than becoming the bedrock of the growth story.

Speaker #3: And so the store opening has become the icing rather than the cake. This, you know, our growth is predicated on improved performance out of the the units that we've got that return on capital and that on the investments either from us or our franchisees.

Speaker #3: That's where real success comes from. And if we can accelerate stores with the right economics, that's a layer on top, rather than becoming the bedrock of the growth story.

Speaker #2: Morning. Wayne Brown from Palmyra Liberum. Three questions from me. Very good performance on sales and like-for-likes, so well done on that. And yes, there were some labor reasons, but can we just discuss the conversion of that sales growth into profit growth?

Wayne Brown: Morning. Wayne Brown from Panmure Gordon. Three questions from me. Very good performance on sales and like-for-likes. Well done on that. Yes, there were some labor reasons. Can we just discuss the conversion of that sales growth into profit growth?

Speaker #2: And you've laid out quite clearly the benefits that you're going to get from supply chain, but I'd much rather, if we can, just discuss overheads.

Andrew Andrea: Yeah.

Wayne Brown: You've laid out quite clearly the benefits that you're going to get from supply chain. I'd much rather if we can just discuss overheads. In your time here, Andrew, is there too much overhead in the business?

Speaker #2: Is there a—you know, in your time here, Andrew—is there too much overhead in the business? Is it the right level? Is there a cost opportunity?

Andrew Andrea: Yes.

Wayne Brown: Is it the right level? Is there a cost opportunity? Clearly, with opening less stores, you're obviously going to be paying less store rebates, et cetera. If we can just speak about that for a bit. Second question's on HFSS. Not being able to market before 9:00 PM, what the impact of that has been. Has that also, on the positive, freed up cash to invest elsewhere in marketing? That'd be quite good to understand. Then on the tech stack, you mentioned personalization as an untapped opportunity. Can you just walk us through where the tech stack is at the moment and what investment is required so you can deliver on the strands of the loyalty and personalization as to what you want to target in FY27? Thanks.

Speaker #2: Clearly, with opening fewer stores, you're obviously going to be paying less in store rebates, etc. So if we can just speak about that for a bit.

Speaker #2: Second question is on HFSS, and not being able to market before 9:00 p.m. What the impact of that has been, and has that also, on the positive, freed up cash to invest elsewhere in marketing?

Speaker #2: That would be quite good to understand. And then on the tech stack, you mentioned personalization as an untapped opportunity. Can you just walk us through where the tech stack is at the moment, and what investment is required so you can deliver on the strands of loyalty and personalization that you want to target in FY27?

Speaker #2: Thanks.

Speaker #3: Okay.

Speaker #1: Do you want to start with—

Nicola Frampton: Do you want to start?

Andrew Andrea: Do you want me to take one and three, then you take the HFSS piece? Because the third one actually is linked.

Speaker #3: Yeah. Do you want me to take 1 and 3, and then you take the HFSS piece? Because the third one actually is linked.

Speaker #1: Yeah. Yeah. Yeah. Fine.

Nicola Frampton: Yeah. Fine.

Speaker #3: So so I think, well, it's a it's a really fair challenge that, you know, we've had the the sales growth come through, but, you know, predominantly our supply chain earns profit through volume.

Andrew Andrea: I think, Wayne, it's a really fair challenge that we've had the sales growth come through, but predominantly our supply chain earns profit through volume. Volumes are up 2%, so you've just got a little bit of a delta between the system sales growth and the profit that flows through into our supply chain. Notwithstanding that, margins are slightly behind in the H1 as we've invested to some one-off costs to facilitate the automation program coming through, I think those benefits will start creeping through in the H2 of this year. In fact, I've had conversations with many of you this morning.

Speaker #3: And so volumes are up 2%. So you've just got a little bit of a delta between the system sales growth and the profit that flows through into our supply chain.

Speaker #3: Notwithstanding that, margins are slightly behind in the first half of the year as we've invested in some one-off costs to facilitate the automation program coming through.

Speaker #3: And I think those benefits will start creeping through in the second half of this year. In fact, I've had conversations with many of you this morning, and in the modeling we've built, we've got much more visibility of when the benefits of that automation will come through in '27 and '28.

Andrew Andrea: In the modeling we've built, we've got much more visibility of when the benefits of that automation will come through in 2027 and 2028, as such, we sort of nudged up those out year numbers, that's based on margin improvement rather than hope at top line level. I think supply chain's in decent fettle. Nicola's alluded to the fact we are looking at more efficiency opportunities. On the overheads, I think it's a really fair challenge. My view is simple. Every business in the world is looking at its overhead structure and whether it can be more efficient or not. It's under constant review. My view is you can't save your way to prosperity, where we can save overhead and become more efficient, we will do so, it can't be to the detriment of the growth agenda.

Speaker #3: And as such, we sort of nudged up those out-year numbers. And that's based on margin improvement rather than hope at the top-line level. So I think supply chains are in decent fettle. Nicholas alluded to the fact we are looking at more efficiency opportunities.

Speaker #3: On the overheads, I think it's a really fair challenge. My view is simple: every business in the world is looking at its overhead structure and whether it can be more efficient or not.

Speaker #3: It's under constant review. My view is that you can't save your way to prosperity. But where we can save overhead and become more efficient, we will do so, but it can't be to the detriment of the growth agenda.

Speaker #3: And also, we've just got to balance the overhead savings that we could generate, offset by investing in tech—as you're describing, AI—that might be required to drive further efficiency going forward.

Andrew Andrea: Also, we've just got to balance the overhead savings that we could generate offset by investing in tech, as you're describing, AI, that might be required to drive further efficiency going forward. It's a little bit of a balloon up and down at the moment, but under constant review. To say there's a swathe of overhead to come out, I don't think that does exist. Should we be focusing on doing things smarter and more efficiently? Absolutely. Whether that's support, whether it's marketing, everything we do, we are perhaps putting a little bit more rigor on do we really need to spend that, and are we getting the requisite spend on that? On the tech stack, we've got a program and a commitment to continue investing in our e-commerce platform around GBP 8 million a year. I sort of look on that as maintenance.

Speaker #3: So it's a little bit of a balloon up and down at the moment, but under constant review. So to say there's a swathe of overhead to come out, I don't think that does exist.

Speaker #3: Should we be focusing on doing things smarter and more efficiently? Absolutely. Whether that's support, whether it's marketing—everything we do—we are perhaps putting a little bit more rigor on: Do we really need to spend that?

Speaker #3: And are we getting the requisite spend on that? On the tech stack, we've got a program and a commitment to continue investing in our e-commerce platform—around £8 million a year.

Speaker #3: I sort of look on that as maintenance. It enables us to continue to invest in that digital innovation going forward. So I think we've got a very hard-coded tech strategy.

Andrew Andrea: It enables us to continue to invest in that digital innovation going forwards. I think we've got a very hard-coded tech strategy. Again, we're really asking the hard questions whether we can do that more efficiently, but in driving efficiency, you're probably having to reinvest somewhere else to ensure you're staying ahead of the game with our digital agenda.

Speaker #3: Again, we're really asking the hard questions about whether we can do that more efficiently. But in driving efficiency, you're probably having to reinvest somewhere else to ensure you're staying ahead of the game with our digital agenda.

Speaker #1: The the only thing I'd add to that, actually, for me, is Wayne, is certainly the investment that we're making in loyalty, sat behind it is a is a a behemoth of a of a customer database.

Nicola Frampton: The only thing I'd add to that, actually, from me, Wayne, is certainly the investment that we're making in loyalty, sat behind it is a behemoth of a customer database. That we've obviously invested in that as part of the loyalty program investment. That effectively will yield a significantly richer source of customer information. We already have black belts in the organization in AI and analysis that can then use that to really stimulate Sales talk to customers, personalize their app experience to them. I think we've talked about being the Netflix of pizza, and I think that is something that is becoming increasingly true of us in terms of our capability. We're not looking at needing lots of additional investment around personalization.

Speaker #1: And we've obviously invested in that as part of the loyalty program investment. That will effectively yield a significantly richer source of customer information.

Speaker #1: We already have black belts in the organization in AI and analysis that can then use that to really sort of stimulate sales, talk to customers, personalize, you know, their app experience to them.

Speaker #1: It's—you know, I think we've talked about being the Netflix of pizza. And I think that is something that is becoming increasingly true of us in terms of our capability.

Speaker #1: So we're not looking at needing lots of additional investment around personalization. What we're looking to do, really, is make sure we absolutely sweat the asset of the investment that we've made so far in loyalty.

Nicola Frampton: What we're looking to do really is make sure we absolutely sweat the asset of the investment that we've made for Domino's Rewards, because ultimately, that's the engine room of it all. Back to me.

Speaker #1: Because ultimately, that's the engine room of it all. Back to me.

Speaker #3: HFSS. Yes.

Andrew Andrea: HFSS, yes.

Speaker #1: HFSS. So, look, I think, again, has there been any impact of the advertising restrictions at 9:00 p.m.? Not that we've really seen. You can see, again, as a result of our like-for-like sales and our order count performance, that it hasn't had any negative impacts on the business.

Nicola Frampton: Look, I think, again, has there been any impact of the advertising restrictions at 9:00 PM? Not that we've really seen. You can see, again, as a result of our like for like sales and our order count performance, that it hasn't had any negative impact on the business. Undoubtedly, it will have had some impact in terms of not being on those particular TV slots. To your point, actually, what we're doing is redeploying the media spend into other avenues that are compliant to make sure that we still use that spend effectively. Again, we use an AI capability now to help us manage and support our media buying and media spend so that it puts it in the right places and makes sure we get a good sort of revenue return on investment from that spend.

Speaker #1: Undoubtedly, it will have had some impact in terms of, you know, not being on those particular TV slots. But to your point, actually, what we're doing is redeploying the media spend into other avenues that are compliant, to make sure that, you know, we still use that spend effectively.

Speaker #1: And again, we're we've we use an an an AI capability now to manage and help us manage and support our media buying and media spend so that it puts it in the right places and makes sure that we get a good sort of revenue return on investment from that from that spend.

Speaker #1: So all of our metrics around marketing spend, in terms of working, non-working, but also return on investment, are still on good trends. And so we haven't really seen any impact at all, Wayne, to be fair.

Nicola Frampton: All of our metrics around marketing spend in terms of working, non-working, but also return on investment are still on good trends. We haven't really seen any impact at all, Wayne, to be fair. I think we will always do everything we can to remain compliant. My point of view in terms of the long term is that we absolutely support both what's happening in terms of the health and nutrition agenda. Also, I would say I would like to see that be evidence-based and therefore also implementable, which I think is where we are at today. I think the other thing is to recognize that we're not actually a meal that is eaten regularly anyway. We're an occasion meal with four and a half times frequency.

Speaker #1: So I think I think, you know, we will always do everything we can to remain compliant. My my point of view in terms of the long term is that we absolutely support both what's happening in, you know, in terms of the health and nutrition agenda, but also I would say I do, you know, would like to see that be evidence-based and therefore also implementable, which I think is where we are at today.

Speaker #1: And I think the other thing is to recognize that we're not actually a meal that is eaten regularly anyway. We're an occasion meal.

Speaker #1: We're four and a half times frequency. So some of these restrictions have a dilutive effect to perhaps some of our other sort of QSR competitors.

Nicola Frampton: Some of these restrictions have a dilutory effect to perhaps some of our other sort of QSR competitors. I think that was it. Is that everything?

Speaker #1: I think that was it. Is that everything?

Speaker #2: Thanks. Katie Pisan, Shure Capital. Firstly, just on aggregators, have you disclosed a split of orders by aggregators? And then also, just the visibility around that.

Katie Piddington: Thanks. Katie Piddington, Shore Capital. Firstly, just on aggregators, have you disclosed a split of orders by aggregators? Also just the visibility around that. I know it's a bit hard, but do you get any insight versus the customer behavior when they're on those aggregator sites, et cetera? A point that you pulled out in previous presentations as an untapped potential market was gift cards, and I think you said that could be a potential GBP 9 billion market. Any update around that or anything we should be thinking about? Finally, just on product development. Clearly, chicken was a great opportunity, no CapEx. Is there other opportunities that you can expand your current menu or any sort of white space or opportunity there? Thanks.

Katie Cousins: Thanks. Katie Piddington, Shore Capital. Firstly, just on aggregators, have you disclosed a split of orders by aggregators? Also just the visibility around that. I know it's a bit hard, but do you get any insight versus the customer behavior when they're on those aggregator sites, et cetera? A point that you pulled out in previous presentations as an untapped potential market was gift cards, and I think you said that could be a potential GBP 9 billion market. Any update around that or anything we should be thinking about? Finally, just on product development. Clearly, chicken was a great opportunity, no CapEx. Is there other opportunities that you can expand your current menu or any sort of white space or opportunity there? Thanks.

Speaker #2: I know it’s a bit hard, but do you get any insight in, versus, like, the customer behavior when they’re on those aggravating aggregator sites, etc.?

Speaker #2: A point that you brought up in previous presentations as an untapped potential market was gift cards. I think you said that could be a potential $9 billion market.

Speaker #2: Any update around that, or anything we should be thinking about? And then, finally, just on product development—clearly, chicken was a great opportunity. No capex.

Speaker #2: But is there other opportunities that you can expand your current menu, or any sort of white space of opportunity there? Thanks.

Speaker #1: The problem, Katie. Thank you. Firstly, on the aggregators, I think we do disclose.

Nicola Frampton: No problem, Katie. Thank you. Firstly, on the aggregators, I think we do disclose-

Speaker #3: We don't disclose.

Andrew Andrea: We don't disclose the mix. No.

Speaker #1: We don't disclose the mix, right? So I'm not going to disclose the mix. Why is that next to me? To keep me honest. I know what the mix is.

Nicola Frampton: We don't disclose the mix, right. I'm not going to disclose the mix. That's why he's sat next to me, to keep me honest. I know what the mix is, and it doesn't concern me. I think the important thing, Katie, is actually the degree of incrementality that sits on those aggregator platforms. That is something that we are absolutely able to evaluate and analyze, and that is under constant scrutiny. We're on two aggregator platforms at the moment, and both are delivering similar levels of incrementality. We effectively know that there's substantial benefit from us being on those aggregator platforms, just in terms of increasing our reach and sort of capturing the customer that otherwise we wouldn't be able to speak to because they use that platform for all of their purchasing, food purchasing opportunities. I think it's a channel that's very complementary.

Speaker #1: And it doesn't confirm for me, but I think the important thing, Katie, is actually the degree of incrementality that sits on those aggregator platforms.

Speaker #1: That is something that we are absolutely able to evaluate and analyze and and that is under constant scrutiny. And, you know, we're on we're on two aggregator platforms at the moment and both have a a delivering similar levels of incrementality.

Speaker #1: And we are effectively know that there's substantial benefit from us being on those aggregator platforms just in terms of increasing our reach and sort of capturing the the that the, you know, the customer that otherwise it wouldn't be able to speak to because, you know, they're they use that platform for all of their oh, sorry.

Speaker #1: All of their, you know, purchasing—food purchasing opportunities. So I think, you know, it's a channel that's very complementary. It's not growing in a way, in terms of the mix of orders altogether, Katie, that gives us any cause for concern whatsoever.

Nicola Frampton: It's not growing in a way in terms of the mix of orders altogether, Katie, that give us any cause for concern whatsoever, and the incrementality is very high. Would have to fall substantially from where it is for it to then hit a tipping point that says, this is not a good place for us to be. Aggregator economics matter. They matter to us, and they matter to franchisees. We always evaluate the offset between the incrementality and the reach versus the cost of doing business. In terms of the customer behavior, the behavior's pretty much the same. When you look at things like our average ticket, et cetera, Katie, there are variances, but they're not substantially different just in terms of the ticket and things like delivery charges.

Speaker #1: And the incrementality is very, very high. It would have to fall substantially from where it is for it to then hit a tipping point that says, you know, this is not a good place for us to be.

Speaker #1: So, you know, aggregator economics matter. They matter to us, and they matter to franchisees. So, you know, we always evaluate the offset between the incrementality and the reach versus, you know, the cost of doing business.

Speaker #1: In terms of the customer behavior, I mean, the the behavior's pretty much the same. And when you look at things like our average ticket etc., Katie, that that there are variances, but they're not they're not substantially different just in terms of, you know, the ticket and things like delivery charges.

Speaker #1: I think it's the consumer that is on there. We know is slightly different—typically a bit younger, a little bit more affluent, and therefore, you know, again, that's why we see them as a really great, you know, customer access channel for us.

Nicola Frampton: I think it's the consumer that is on there we know is slightly different, typically a bit younger, a little bit more affluent. Therefore, again, that's why we see them as a really great customer access channel for us.

Speaker #3: What we do know is that what we call our champions — so, our higher quality customers, our higher frequency customers — are still ordering through our app.

Andrew Andrea: What we do know is that our, what we call our champions, so our higher quality customers, our higher frequency customers, are still ordering through our app. The aggregators, to Nicola's point, are those people that buy less frequently, and you've got to be in it to win it, frankly. Those better quality customers, we do have that direct visibility. They stay loyal to the Domino's system.

Speaker #3: The aggregators, to Nicola's point, are those people that buy less frequently. And you've got to be in it to win it, frankly. So those better-quality customers, we do have that direct visibility.

Speaker #3: They stay loyal to the Domino's system.

Speaker #1: Yes, absolutely. You asked a question about gift cards. We did talk about it in terms of the opportunity when we sat down in March.

Nicola Frampton: Yep, absolutely. You asked a question about gift cards. We did talk about it in terms of the opportunity when we sat down in March. I think if you think about the biggest execution risk to delivering our strategy when we're talking about more customers more often and more efficiently, it's losing focus and trying to do too much at once. That's been something that I think as a business, we have been guilty of in the past.

Speaker #1: But I think if you think about, you know, the biggest execution risk to delivering our strategy—when we're talking about more customers, more often, and more efficiently—it's losing focus and trying to do too much at once.

Speaker #1: And that's been something that I think, as a business, we have been guilty of in the past. I think since Andrew joined the business in March, and we've been through a very robust integrated business planning process, as he's already alluded to, we are going to focus on doing more less—really well—and then bring the next thing, and then bring the next thing to you when these initiatives have a clear plan and some numbers that we're actually prepared to stand behind and bake into our numbers.

Nicola Frampton: I think since Andrew joined the business in March and we've been through a very robust integrated business planning process, as he's already alluded, we are going to focus on doing less really well, and then bring the next thing, and then bring the next thing to you when these initiatives have a clear plan and some numbers that we're actually prepared to stand behind and bake into our numbers. We have a very strong pipeline of things. The gift card market is still one of them. There are others as well, but we feel that we should concentrate in terms of making sure that we land the things that we want to land, like chicken, loyalty aggregators now. We will move on to the next thing, analyze that, bring that back. It's the same with some of the formats, work and travel retail.

Speaker #1: So we have a very strong pipeline of things; the gift card market is still one of them. There are others as well, but we feel that we should concentrate on making sure that we land the things that we want to land, like chicken, loyalty aggregators, and so on.

Speaker #1: Then we will move on to the next thing, analyze that, bring that back. It's the same with some of the formats, work, and travel retail.

Speaker #1: I think we referenced that in March as well. So, you know, I'm not in a position to answer questions on those at the moment, but do know that we are working on those in the background.

Nicola Frampton: I think we referenced that in March as well. I'm not in a position to answer questions on those at the moment, but do know that we are working on those in the background. When we believe that there is something here that we wish to then start investing in or to exploit, we'll then bake them into our numbers and put those into the guidance, et cetera, that we give you all because I think that is a much more honest and transparent way for us to talk about how the business is performing.

Speaker #1: And when we believe that there is something here that we wish to then start investing in or, you know, to exploit, we'll then bake them into our numbers and put those into our, you know, the guidance, etc.

Speaker #1: ...that we give you all, because I think that is a much more honest and transparent way for us to talk about how the business is performing.

Speaker #3: What has built our model is chicken. We have a value ascribable to chicken, a value ascribable to loyalty, a value ascribable to aggregators, and a value ascribable to supply chain efficiency.

Andrew Andrea: What has built our model is chicken. We have a value ascribable to chicken, a value ascribable to loyalty, a value ascribable to aggregators, and a value ascribable to supply chain efficiency. That is what builds the math, the numbers we're guiding you on. The philosophical change is really simple. We'll come and tell you when we have done and when we've got confidence that those activities can meaningfully add value going forwards. That is going to be the change in how we sort of report things to the market. It's not we're not thinking about it. It's we're not going to present false dawns to you because I think you're quite right. You're saying, Well, you said this. Where is it? That stops.

Speaker #3: That is what builds the math, the numbers we're guiding you on. The philosophical change is really simple. We're not going to come and say, "We're going to." We'll come and tell you when we have done and when we've got confidence that those activities can meaningfully add value going forward.

Speaker #3: That is going to be the change in how we sort of report things to the market. It's not that we're not thinking about it; it's just that we're not going to present false dawns to you, because I think you're quite right.

Speaker #3: You're saying, "Well, you said this; where is it?" That stops.

Speaker #1: In terms of the organic growth strategy we set out in the presentation, you know, the sort of structure of how we're looking at the business in terms of more.

Nicola Frampton: In terms of the organic growth strategy we set out in the presentation the sort of structure of how we're looking at the business in terms of more, and underneath the gray on that slide, there's another sort of row after row after row of what these initiatives are, but they all ultimately have to pass the sniff test against our North Star. If it's not going to deliver more customers, if it's not going to make them more frequent and therefore increase lifetime value, or it's not going to make us more efficient, why are we doing it?

Speaker #1: And underneath the gray on that slide, there's another sort of row after row after row of what these initiatives are. But they all ultimately have to pass the sniff test against our North Star.

Speaker #1: So, if it's not going to deliver more customers, if it's not going to make them more frequent and therefore increase lifetime value, or it's not going to make us more efficient, why are we doing it?

Speaker #1: There might be a good reason to do it, but we need to be in a position then to explain to you all that, you know, I think having that—keeping ourselves honest and not making promises that we can't have certainty around delivery—is the way we drive the value of this business forward.

Nicola Frampton: There might be a good reason to do it, we would need to be in a position then to explain to you all that I think having that, keeping ourselves honest and not making promises that we cannot have certainty around delivery is the way we drive the value of this business forward. Your final question for us on product development. What is there beyond chicken and pizza in terms of menu expansion? It is a multifaceted response in some respects, Katie, because chicken is a brand new product, and it is way off where I think chicken could be as a product proposition. There is a lot of work going on at the moment on the existing proposition, particularly around dips and also around flavoring for the coating.

Speaker #1: And then your final question, sorry, was on product development. What what is there beyond chicken and pizza in terms of menu expansion? And it's a it's a multifaceted response in some respects, Katie, because chicken is is a is a brand new product and it is way way off where I think chicken could be as a product proposition.

Speaker #1: So there's a lot of work going on at the moment on the existing proposition, particularly around dips and also around flavoring for the coating.

Speaker #1: But then, you know, one of the big areas that I think is complementary to both pizza and to chicken is what are we doing with our sides?

Nicola Frampton: One of the big areas that I think is complementary to both pizza and to chicken is what are we doing with our sides. We are also cognizant around the healthy food agenda, which is something that is clearly it is not just a regulatory thing, but it is a consumer thing. Some customers want healthier options, want smaller calorie options, a lot of the work that we are doing actually is exploring how do we expand the menu around some of the sides so that they are complementary to both chicken and to pizza. Effectively, we will continue with the basket expansion that we are seeing chicken bring to the business. That is roughly where we are going. Do I see us sort of getting into something else completely different? Not at this stage, because I think chicken has so much more left to offer.

Speaker #1: And we're also cognizant around the, you know, the healthy food agenda, which, you know, is something that is clearly—not just a regulatory thing, but it's a consumer thing as well.

Speaker #1: Because, you know, some customers want healthier options, want smaller smaller calorie options and, you know, so we're we're a lot of the work that we're doing actually is is exploring how do we expand the menu around some of the sides so that they are complementary to both chicken and to pizza.

Speaker #1: But but effectively, we'll we'll continue with the the basket expansion that we're seeing chicken bring to bring to the business. So that's roughly where we're going.

Speaker #1: Do I see us sort of getting into something else completely different? Not at this stage, because I think chicken has so much more left to offer.

Speaker #1: I think, again, it goes back to focusing on doing less, really well. And I think chicken is, for us, still a largely immature product.

Nicola Frampton: I think, again, it goes back to focus on doing less really well, I think chicken is, for us is still an immature product, largely. I think we have taken a lot of care to analyze it and go, are we backing the right horse here, or the right hen in this case? I think we have concluded, yes, we are, that is where the focus will be in terms of if the evolution of that.

Speaker #1: I think, you know, we've taken a lot of care to analyze it and go, are we backing the right horse here?

Speaker #1: And are we right then in this case? And I think we've concluded, yes, we are. And so that's where the focus will be in terms of the evolution of that.

Speaker #2: Yeah, morning. Thanks. Just one question for Andrew, please, on interest costs. You've got debt facilities of $600 million versus monthly average net debt of under $300 million.

Richard Turner: Morning, thanks. Just one question for Andrew, please. On interest costs, you have got debt facilities of GBP 600 million versus monthly average net debt of under GBP 300 million. I know you mentioned this in your part of the presentation, Andrew, obviously I know you are looking at it, just keen to understand, given the focus on deleverage that you have also talked about this morning in terms of capital allocation-

Richard Taylor: Morning, thanks. Just one question for Andrew, please. On interest costs, you have got debt facilities of GBP 600 million versus monthly average net debt of under GBP 300 million. I know you mentioned this in your part of the presentation, Andrew, obviously I know you are looking at it, just keen to understand, given the focus on deleverage that you have also talked about this morning in terms of capital allocation-

Speaker #2: And I know you mentioned this in your part of the presentation, Andrew, but so obviously I know you're looking at it. But just keen to understand, given the focus on deleverage that you've also talked about this morning in terms of capital allocation, rather than, say, buybacks—so, you know, what's the size of the prize here in terms of how much you can potentially reduce this by without incurring cost?

Andrew Andrea: Yeah

Richard Turner: rather than, say, buybacks. What's the size of the prize here in terms of how much you can potentially reduce this by without incurring costs? I realize the USPP looks like one of them is due in July 2027, you have to wait until then. Just sort of thoughts on how that could evolve over time. What are your thoughts on that and thoughts on interest costs in the out years would be welcome.

Richard Taylor: rather than, say, buybacks. What's the size of the prize here in terms of how much you can potentially reduce this by without incurring costs? I realize the USPP looks like one of them is due in July 2027, you have to wait until then. Just sort of thoughts on how that could evolve over time. What are your thoughts on that and thoughts on interest costs in the out years would be welcome.

Speaker #2: I realize the USPP looks like one of them's due on July 27th. You have to wait until then. So, just sort of thoughts on how that could evolve over time—what are your thoughts on that?

Speaker #2: And, you know, thoughts on interest costs in the out years would be welcome.

Speaker #3: Yeah. So I it's a really it's a really good question, Richard, because we we've got a lot of debt facility. And, you know, as we've very clearly set out, our focus is on on organic investments so there's a lot of debt to support organic investments.

Andrew Andrea: Yeah. It's a really good question, Richard, because we've got a lot of debt facility. As we've very clearly set out, our focus is on organic investments. There's a lot of debt to support organic investments. If we take the USPP, that GBP 200 million tranche, I talk about the fact we are considering quantum and tenure. My view is, if we just simply refinance the full GBP 200, why would you do that? Because you're fixing in an interest charge for five to seven years, depending on when the tenor lands, and you're not going to see any reward for reducing your debt, and we'd be sitting on excess cash. I think that number will be below GBP 200, and it'll be a balance of USPP, draw down some of the RCF.

Speaker #3: So, if we take the USPP, that $200 million tranche, I talked about the fact we are considering quantum and tenure. My view is, if we just simply refinance the full $200 million, why would you do that?

Speaker #3: Because you're fixing in an interest charge for five to seven years, depending on when the tenure lands. And you're not going to see any reward for reducing your debt.

Speaker #3: And we'd be sitting on excess cash. So, you know, I think that number will be below 200. And it would be a balance—balance of USPP, draw down some of the RCF, the RCF gets paid down on—. You are immediately rewarded for a lower level of debt overall because you're drawing down less.

Andrew Andrea: The RCF gets paid down and you are immediately rewarded for a lower level of debt overall because you're drawing down less. Will that be the full GBP 200? No. I think that's probably pushing it a bit. Probably in the middle feels like a sensible place, but we'll update that accordingly. To your point, you get the requisite reduction in interest as we pay that debt down, and our target on that debt and leverage, looking at the modeling we've got, we'd expect to get to that one and a half times level within the next two to three years. Certainly expect the end of this year to fall back a little bit. We knew we were investing in the supply chain center, and we're permitting ourselves a little spike up to 2.3x.

Speaker #3: Will that be the full 200? No, I think that's probably pushing it a bit. Probably somewhere in the middle feels like a sensible place, but we'll update that accordingly.

Speaker #3: To your point, then, you get the requisite reduction in interest as we pay that debt down. And our target on that debt and leverage, looking at the modeling we've got, we'd expect to get to that 1.5 times level within the next two to three years.

Speaker #3: Certainly expect that at the end of this year to fall back a little bit. We knew we were investing in the supply chain center, and we’re permitting ourselves a little spike up to 2.3.

Speaker #3: That will nudge back this year, but I expect to see a meaningful drop down over the course of the next couple of years or so.

Andrew Andrea: That will nudge back this year, but I expect to see meaningful drop-down over the course of the next couple of years or so. Clearly, if you just play the basic math on an EV/EBITDA basis, that should be rewarded through the equity value as you pay the debts down. What I'm keen to do, though, is that Nicola has mentioned these other opportunities that are not yet fully evaluated. Some of those may require CapEx. What I don't want to do is limit our balance sheet and prohibit us from making organic investments by over-tightening our liquidity facilities. We've got the opportunity, a little bit like we've done with SCC this year. If we say there's a GBP 20 million investment that's going to return us GBP 5 million plus, we should be doing that. I don't want us to box ourselves into a corner inappropriately.

Speaker #3: Clearly, if you just play the basic math on an EV, but DAR basis, that should be rewarded through the equity value as you pay the debts down.

Speaker #3: What I'm keen to do, though, is that Nikola has mentioned these other opportunities that are not yet fully evaluated. Some of those may require capex.

Speaker #3: And what I don't want to do is limit our balance sheet and prohibit us from making organic investments by overtightening our liquidity facilities.

Speaker #3: So we've got the opportunity, a little bit like we've done with SCC this year. If we say there's a $20 million investment that's going to return us $5 million plus, we should be doing that.

Speaker #3: So, I don't want us to box ourselves into a corner inappropriately, but overall, just to reinforce that point on the capital allocation, this is really noddy.

Andrew Andrea: Overall, just to reinforce that point on the capital allocation, this is really Noddy. Invest in the business, run rate maintenance at around GBP 20 million with a very strict 20% hurdle rate. Maintain the dividends, keep the real value protected by that nod to inflation, and whatever's left over, you pay down debt and reduce leverage. I think it's a really simple allocation framework. It is appropriate for a business of our nature operating in the UK equity market.

Speaker #3: Invest in the business: run rate maintenance at around $20 million, with a very, very strict 20% hurdle rate. Maintain the dividends and keep the real value protected by that nod to inflation.

Speaker #3: And whatever's left over, you pay down debt and reduce leverage. I think it's a really simple allocation framework. It is appropriate for a business of our nature operating in the UK equity market.

Speaker #2: Thank you, Michael. Hi, good morning. Richard Stieber from Deutsche Bank. Three questions, please. The first one—I thought it was really interesting—you talk about the market share of chicken going from 3.8% to 4.2%.

Richard Stuber: The second question is around marketing. I guess, given the launch of Chicken Strippers and also the World Cup, were you slightly more H1 weighted in terms of marketing spend this year, and just really what your plans are for marketing over the course of the rest of the year. My third question is on Ireland. In terms of your profitability increased nicely there.

Speaker #2: Just so that, presumably, that means that even prior to the chicken dip, your legacy chicken is still doing incredibly well.

Speaker #2: Could you talk about sort of the interaction between sort of a chicken orders of your legacy versus your sort of chicken dip and where you see that going?

Speaker #2: The second question is around marketing. I guess, given the launch of Chicken Dip and also the World Cup, were you slightly more H1-weighted in terms of marketing spend this year, and just really, what are your plans for marketing over the course of the rest of the year?

Richard Taylor: The second question is around marketing. I guess, given the launch of Chicken Strippers and also the World Cup, were you slightly more H1 weighted in terms of marketing spend this year, and just really what your plans are for marketing over the course of the rest of the year. My third question is on Ireland. In terms of your profitability increased nicely there.

Speaker #2: And my third question is on Ireland. You've done some—your profitability increased nicely there. I know you're sort of moving away, or standing back a little bit, from your total store targets, but those stores there are kind of within your own.

Richard Stuber: I know you're sort of moving away or standing back a little bit from your total store targets, those stores there are kind of continuing-

Richard Taylor: I know you're sort of moving away or standing back a little bit from your total store targets, those stores there are kind of continuing-

Andrew Andrea: Yeah

Speaker #2: Ability. So can you talk a little bit more about the growth plans in Ireland? Thank you.

Richard Stuber: abilities. Could you talk a little bit more about the growth plans in Ireland? Thank you.

Richard Taylor: abilities. Could you talk a little bit more about the growth plans in Ireland? Thank you.

Speaker #1: Thanks, Richard. Look, I think in terms of chicken market share, we did already offer chicken. You're absolutely right. And so some of that market share was already there.

Nicola Frampton: Thanks, Richard. Look, I think in terms of chicken market share, we did already offer chicken. You're absolutely right. Some of that market share was already there. We're not separating our old chicken from new chicken. It's just chicken. We're bringing the old product into the range, and it's effectively available as part of the broader Chicken Strippers proposition. I think, we may evolve the product, we may look to retire some of them potentially over time. It will all depend on the mix and what's selling. I think a lot of the market share that we enjoyed from our existing chicken would probably have been more for the younger palate as part of the family and also is consumed as a side.

Speaker #1: But we're not separating out all chicken from new chicken. It's just chicken. And so we're bringing the old products into the range, and it's effectively available as part of the broader chicken dip proposition.

Speaker #1: So I think, you know, we may evolve the product. We may look to retire some of them, potentially, over time. It will all depend on the mix and what's selling.

Speaker #1: But I think a lot of the market share that we enjoyed from our existing chicken would probably have been more for the younger palate as part of the family, and also was consumed as a side.

Speaker #1: The chicken dip proposition is more consumed as a meal, and therefore it is—as far as we can tell. I mean, you don't know who's actually eating the food when it lands at the customer's door.

Nicola Frampton: The Chicken Strippers proposition is more consumed as a meal, therefore, it is, as far as we can tell, I mean, you don't know who's actually eating the food when it lands at the customer's door, but it seems to be an older palate and more of a family food. We're not getting focused on which is old and which is new chicken. It's just chicken, Richard. The intention is to grow our share of that market with whichever product mixes well and is appealing to the customer. In terms of marketing, we haven't particularly changed around the weighting of our marketing profiling. We have changed the mix of it, we did do a lot of spend on chicken over pizza at certain points of the year. Particularly, you'd have seen that in the first few weeks and months following the chicken launch.

Speaker #1: But it it seems to be a an older palette. And, you know, more of a more of a family food. So we're not getting focused on, you know, which which which is old and which is new chicken.

Speaker #1: It's just chicken, Richard. And the intention is to grow our share of that market with whichever product mixes well and is appealing to the customer.

Speaker #1: In terms of marketing, we haven't particularly changed around the weighting of our marketing profiling. We have changed the mix of it. So we did do a lot of spend on chicken over pizza at certain points of the year; particularly, you would have seen that in the first few weeks and months following the chicken launch.

Speaker #1: But in terms of the quantum of the total spend and the profile of that year on year, it hasn't changed fundamentally. We always protect Q4 on a 'fish when the fish are biting' basis because, you know, as soon as you get into that golden quarter, it's really important that you're present.

Nicola Frampton: In terms of the quantum of the total spend and the profile of that year on year, it hasn't changed fundamentally. We always protect Q4 on a fish when the fish are biting basis because as soon as you get into that golden quarter, it's really important that you're present. No real changes to marketing strategy. I think what is interesting, Richard, is despite the sort of repurposing of marketing towards chicken in terms of the total spend, we didn't see that have a significant impact on the pizza sales. In fact, to say what we do see in the chicken sales that we're enjoying is a significant proportion of them have incremental pizza added into their basket.

Speaker #1: So, no real changes to marketing strategy. I think what is interesting, Richard, is despite the sort of repurposing of marketing towards chicken, in terms of the total spend, we didn't see that have a significant impact on the pizza sales.

Speaker #1: In fact, what we do see in the chicken sales that we're enjoying is a significant proportion of them having incremental pizza added into their basket.

Speaker #1: So it I think some of it is a brand you know, as long as you're out there talking about the brand, you you're still speaking to customers even the ones that just want pizza when it may not be a pizza product.

Nicola Frampton: I think some of it is a brand. As long as you're out there talking about the brand, you're still speaking to customers, even the ones that just want pizza when it may not be a pizza product. Despite some of that headline stuff, there's always a drumbeat of local offers and local marketing that the franchisees do themselves. The national deal for pizza has been running price-wise now for almost 12 months. That proposition, I think, screams value and has been doing a lot of the heavy lifting work for ourselves and for the franchisees as a result. Again, I think that consistency of message around the core value proposition in pizza, the real focus and emphasis on chicken, and really talking about the Domino's brand is, I think we've got quite a lot of bang for our buck out the marketing spend this H1.

Speaker #1: And despite sort of that headline stuff, there's always a drumbeat of local offers and local marketing that the franchisees do themselves. The national deal for pizza has been running, price-less now, for almost 12 months.

Speaker #1: That proposition, I think, screams value and has been doing a lot of the heavy lifting for ourselves and for the franchisees as a result.

Speaker #1: So again, I think that consistency of message around the core value proposition in pizza, the real focus and emphasis on chicken, and really talking about the Domino's brand, as— I think we've got quite a lot of bang for our buck out of the marketing spend this first half.

Speaker #1: And then, Ireland—do you want to talk about Ireland profitability?

Nicola Frampton: Ireland, do you want to talk about Ireland profitability?

Speaker #3: Yeah. Yeah. I mean, Ireland profitability has improved. I mean, the important point, you know, taking outside the Victor consolidation, the underlying performance in Ireland has been pretty strong.

Andrew Andrea: Yeah. Ireland profitability has improved. The important point, taking outside the Shorecal consolidation play through, underlying performance in Ireland has been pretty strong this year. Given we had the impairment last year, that's encouraging. We're seeing positive progress, slightly different operational setup. The current plan with Ireland is to expand through the store base as corporate stores, then we can evaluate what the makeup of the Irish map ultimately looks like. Taking direct control of that expansion agenda is the right strategic way to progress Ireland. There's an opportunity there. The end game, we're still to determine that, but we're taking advantage of the white space opportunity now from a corporate perspective rather than the franchise perspective.

Speaker #3: This year, and given we had the impairment last year, that's encouraging. So we're seeing positive progress, with a slightly different operational setup. The current plan with Ireland is to expand through the store base as corporate stores, and then we can evaluate what the makeup of the Irish map ultimately looks like.

Speaker #3: But taking direct control of that expansion agenda is the right strategic way to progress Ireland. There's an opportunity there. The end game—we're still to determine that—but, you know, we're taking advantage of the white space opportunity now from a corporate perspective rather than the franchise perspective.

Speaker #1: It does go back, though, Richard, to—you know—we're not... we're focused on sales, and the store numbers will be what the store numbers will be.

Nicola Frampton: It does go back, though, Richard, to we're focused on sales, the store numbers will be what the store numbers will be. It's the most under-penetrated market in terms of the Ireland versus UK from a concentration point of view in terms of our stores. We think we'll focus on the end results, which is what drops through the sales and order count lines rather than store counts.

Speaker #1: It's the most underpenetrated market in terms of the Ireland versus UK from a concentration point of view in terms of our stores. But we're we we think we'll focus on, you know, the the end results, which is what drops to the what drops to the sales and and order count lines rather than store counts.

Speaker #3: So, there's a possible capex churn piece. You're absolutely right, which is you invest in the corporate store and then, ultimately, that could be a franchise store down the track.

Andrew Andrea: There's a possible CapEx churn piece, you're absolutely right, which is you invest in the corporate store, then ultimately that could be a franchise store down the track. Yes, currently in the CapEx guidance, yes.

Speaker #3: Yes, currently in the CapEx guidance, yes.

Speaker #1: Thank you for clarifying.

Nicola Frampton: Thank you for clarifying.

Speaker #2: Thank you. Sorry. Follow up—Richard Sullivan, Barclays again. Your comments on the price slides put me in mind to ask about any further thoughts you might have had on an everyday low price strategy versus the current situation, where you have a relatively high headline price and then significant money off or offers.

Richard Turner: Thank you. Sorry, a follow-up. Richard Turner from Barclays again. Your comments on the price slides, Nicola, just reminded me to ask about any further thoughts you might have had on sort of everyday low pricing versus current situation where sort of relatively high headline price and then significant money off or offers. Do you think the current price architecture is there to stay, or do you think there can be tweaks with it?

Richard Taylor: Thank you. Sorry, a follow-up. Richard Turner from Barclays again. Your comments on the price slides, Nicola, just reminded me to ask about any further thoughts you might have had on sort of everyday low pricing versus current situation where sort of relatively high headline price and then significant money off or offers. Do you think the current price architecture is there to stay, or do you think there can be tweaks with it?

Speaker #2: Do you think the current price architecture is here to stay, or do you think it can be tweaked a bit?

Speaker #1: It's a good question, and it's something that is an open and live conversation with franchisees, Richard. So, you know, it's not really something I'm in a position to comment about in any detail.

Nicola Frampton: It's a good question, and it's something that is an open and live conversation with franchisees, Richard. It's not really something I'm in a position to comment about in any detail. I think there is a recognition that the price-wise proposition as a headline is what draws people in. When you look at the mix of sales and orders through the system, the bundle deals and other propositions that you're referring to are also still very popular. We need to be really careful about any changes that we do make, and clearly, some of those changes could have an impact on franchisee profitability, too. It's a live consideration. It's something that we effectively work with the franchisees through a marketing advisory committee, and these are live topics of conversation, but you're not going to see a sudden wholesale shift in strategy.

Speaker #1: But I think there is a recognition that, you know, the the price slice proposition is a headline is what draws people in. But then when you look at the mix of sales and orders through the system, the the bundle deals and and and other propositions that you're referring to are also still very popular.

Speaker #1: So we need to be really careful about any changes that we do make, and clearly some of those changes could have an impact on franchisee profitability too.

Speaker #1: So it's a live consideration. It's something that, you know, we effectively work with the franchisees through a marketing advisory committee, and, you know, these are live topics of conversation.

Speaker #1: But you're not going to see a sudden, wholesale shift in strategy. Whatever we do will be done incrementally and thoughtfully to protect both the customer and the franchisees.

Nicola Frampton: Whatever we do will be done incrementally and thoughtfully to protect both the customer and the franchisees.

Speaker #2: I just have two last questions from me. Are you seeing any change in terms of levels of local store marketing with the franchisees? Are they holding that up?

[Analyst] (Numis): Hi, just two last questions from me. Are you seeing any change in terms of levels of local store marketing with the franchisees? Are they holding that up? The last one was in terms of the market you're seeing growth in delivery at the expense of collection. Are you seeing that within your business?

Douglas Jack: Hi, just two last questions from me. Are you seeing any change in terms of levels of local store marketing with the franchisees? Are they holding that up? The last one was in terms of the market you're seeing growth in delivery at the expense of collection. Are you seeing that within your business?

Speaker #2: And the last one was, in terms of the market, you're seeing growth in delivery at the expense of collection. Are you seeing that within your business?

Speaker #1: Probably quite a quick answer to both, Doug. Not seeing any substantial changes in the local marketing by franchisees. You know, they're committed to growing the pie, as we talk about it.

Nicola Frampton: Probably quite quick answers to both, Doug. Not seen any substantial changes in the local marketing by franchisees. They're committed to growing the pie as we talk about it. Local marketing absolutely complements the work that we do with the MAC around the national advertising campaign. Not seeing any fundamental change. It's certainly not where they are going in order to make savings in their own P&Ls. They, like us, recognize you can't serve yourself rich, and actually, not talking to your customers is probably the last thing that you want to do. No real changes there. In terms of growth in delivery, it's not something that we're seeing, to be honest. I think the performance in both our channels is pretty balanced. I don't think there's much else to say on that, to be fair.

Speaker #1: And so, you know, local marketing absolutely complements the work that that we do with the with the MAC around, you know, the the national advertising campaign.

Speaker #1: So, not seeing any fundamental change. It's certainly not where they are going in order to make savings in their own P&Ls. And, you know, they—like us—recognize you can't save yourself rich, and actually, you know, not talking to your customers is probably the last thing that you want to do.

Speaker #1: So, no, no real changes there. In terms of growth in delivery, it's not something that we're seeing, to be honest. I think the performance in both our channels is pretty balanced.

Speaker #1: And, you know, I don't think there's much else to say on that, to be fair.

Speaker #3: Are we doing center? We have a sort of collection perfection deal, which, you know, incentivizes coming to collect, but there hasn't really moved the mix.

Andrew Andrea: We do incentive. We have a sort of Collection Perfection deal, which incentivizes coming to collect, but it hasn't dial moved the mix.

Speaker #2: Hi, Andrew Pavmelotra from Pan Millibrum. I just want to dig deeper into the loyalty scheme, if you don't mind. Just on the new features that you mentioned that you'll have once a full rollout happens, which is around how personalization and recruitment.

Anubhav Malhotra: Hi, Anubhav Malhotra from Panmure Gordon. I want to just dig deeper into the loyalty scheme, if you don't mind. Just on the new features that you mentioned that you'll have once the full rollout happens, which is around personalization and recruitment. Have any of those been tried in the trial phase, or will they just come in when new launch happens? Has the trial phase been just a simple buy five and get one free? If not, why not? Secondly, on the take rate, 27% take rate at the moment. That suggests to me you have 2.2 million customers, so probably you have marketed it to more than eight million customers already, and there are 14 million in total. How much more is there to go for in terms of actual sign-ups? Do you expect that 27% rate to tick up to a higher number?

Speaker #2: Have any of those been tried in the trial phase, or will they just come in when the new launch happens? Has the trial phase just been a simple 'buy five and get one free'?

Speaker #2: And if not, why not? And then secondly, on the take rate—27% take rate at the moment— that suggests to me you have 2.2 million customers.

Speaker #2: So, probably you have marketed it to more than 8 million customers already, and there are 14 million in total. So, how much more is there to go for in terms of actual sign-ups?

Speaker #2: Do you expect that 27% rate to tick up to a higher number? And lastly, just on the economics of the loyalty scheme—the cost of implementation with the new partner that you're working with—in terms of the central cost line, the overhead line, and also, how will the cost be shared between you and the franchisees?

Anubhav Malhotra: Lastly, just on the economics of the loyalty scheme, the cost of implementation with the new partner that you're working with in terms of the central cost line, the overhead line, and also how will the cost be shared between you and the franchisees?

Speaker #1: I'll let I'll let Andrew talk to the costs question potentially. Look, the new features haven't been tested because the the cap the the solution that we put in place was very basic.

Nicola Frampton: I'll let Andrew talk to the cost question potentially. Look, the new features haven't been tested because the solution that we put in place was very basic, we've not had the functionality to be able to test it in the real world, so to speak, which is one of the reasons we've worked really closely in terms of modeling what the impact of that might be on our customer base. It will be rolled out with full features, but we will still be undergoing a period of testing and learning around what works, what doesn't. That's no different to actually using the existing CRM capability to analyze and understand what works and when. That's why not, because although in the way we look at loyalty in the business is.

Speaker #1: And so, we've not had the functionality to be able to test it in the real world, so to speak. Which is one of the reasons we've worked really closely in terms of modeling what the impacts of that might be on our customer base.

Speaker #1: So, it will be rolled out with full features, but we will still be undergoing a period of testing and learning around what works and what doesn't.

Speaker #1: But that's no different to effectively using, you know, the existing CRM capability to analyze and understand what works and when.

Speaker #1: So, you know, that's why not, because as I said, they—they are, although in the way we look at loyalty in the business, is we keep doing that, don't I?

Speaker #1: Don't I that? We we see it as as a continuation of a program on extension of a program, but the reality is there's a hard stop on the old scheme and a and a transition to the new one.

Nicola Frampton: We see it as a continuation of a program or an extension of a program, the reality is there's a hard stop on the old scheme and a transition to the new one. It's a very different solution. In terms of your estimates on the 2.2 million actually is a capacity issue, which goes back to the fact that this is not a fully fledged program, this has been invitation only, and it's been rolled out around specific cohorts. The take-up rate's probably been higher than you might model for a typical scheme. We still think there's a big chunk of the database that we've not even spoken to yet about loyalty.

Speaker #1: So it's a very different solution. In terms of your estimates on the 2.1, one of the reasons we're at 2.2 million actually is a capacity issue, which goes back to the fact that this is not a fully fledged program.

Speaker #1: And so this has been an invitation earlier, and it's been rolled out around specific cohorts. So the take-up rate's probably been higher than you might model for a typical scheme.

Speaker #1: So we still think there's a big chunk of the database that we've not even spoken to yet about loyalty. And and I think the first thing is just really to remind you that it it this scheme is not about the existing customer or no, this is about the existing customer base, but it is also then about a future customer database as well, which is is where we have no functionality currently to be able to invite people to join Domino's Loyalty in order to become a customer, which is the reverse of of how we do it currently.

Nicola Frampton: I think the third thing is just really to remind you that this scheme is not about the existing customers, but it is also then about a future customer database as well, which is where we have no functionality currently to be able to invite people to join Domino's Rewards in order to become a customer, which is the reverse of how we do it currently.

Speaker #3: Yeah. On the economics, I want to answer a little bit of both. So there's a bit of cost from us; there's a bit of cost from franchisees.

Andrew Andrea: On the economics, honest answer, it's a bit of both. There's a bit of cost from us, there's a bit of cost from franchisees. The way we model it out, we're very transparent when talking to franchisees. What do we think we're going to make? What do we think you're going to make? Does that look about right? They have to be behind this. If they're not behind it, this ain't going to happen. They are behind it. They recognize it's not something you can just say six months down the line, "We don't like it." We've got a longer term commitment. Both parties, coming back to Nicola's point, this grows the pie for both parties, it works, but it does need a little bit of cost on both sides. That's incorporated into our guidance already, yeah.

Speaker #3: The way we model it out, we're very transparent when talking to franchisees. What do we think we're going to make? What do we think you're going to make?

Speaker #3: Does that look about right? They have to be behind this. If they're not behind it, this isn't going to happen. They are behind it. They've recognized it's not something you can just say six months down the line, 'We don't like it,' so we've got a longer-term commitment.

Speaker #3: But both parties, coming back to Nicholas's point, this grows the pie for both parties. So it works, but it does need a little bit of cost on both sides.

Speaker #3: That's incorporated into our guidance already, though.

Speaker #2: Sorry, one last question from me. Are you seeing much variability in the performance between the franchisees—specifically, the larger franchisees versus the smaller ones?

Wayne Brown: Sorry, one last question from me. Are you seeing much variability in the performance between the franchisees, vis-à-vis the larger franchisees versus the smaller ones? If there is variability in that performance, assuming that scale really matters in today's world, do you expect franchisee consolidation to be a theme in the future relative to where we are today?

Speaker #2: And if there is variability in that performance, assuming that scale really matters in today's world, do you expect franchisee consolidation to be a theme in the future relative to where we are today?

Speaker #1: There is always franchisee variability, Wayne. And, you know, it does have a relationship to size to some extent, but it's not a hard-coded rule.

Nicola Frampton: There is always franchisee variability, Wayne. It does have a relationship to size to some extent, it's not a hard-coded rule. There are certain points as you grow your scale, where you need to invest more in capability like such as training and the central capabilities that a smaller franchisee doesn't need. Effectively, you can see small franchisees with really strong profitability, the big ones with scale, then it's the group in the middle that are building to the capabilities that they need. It's not a linear matter at all. The system, though, as you're talking about consolidation, I think is already heavily consolidated in some respects. I think a lot of our franchisees are groups of 10 stores or more, and they're able to really optimize their cost and therefore their profitability.

Speaker #1: That there are certain points that, you know, as you grow your scale where you need to invest more in capability like such as training and other, you know, the central capabilities that a smaller franchisee doesn't need.

Speaker #1: So effectively, you can see small franchisees with really strong profitability, the big ones with scale, and then it's the group in the middle that are building to, you know, the capabilities that they need.

Speaker #1: So it's it's not it's not a linear matter at all. The system though, as you're talking about, you know, consolidation, I think is already heavily consolidated in some respects.

Speaker #1: And, you know, I think a lot of our franchisees are groups of 10 stores or more, and they're able to really, you know, optimize their costs and therefore their profitability.

Speaker #1: The the the the real variation, the main variation we see actually is is more regional than it is necessarily franchisee based. And that's that's how we look at it.

Nicola Frampton: The real variation, the main variation we see actually is more regional than it is necessarily franchisee based. That's how we look at it. Now, some of those franchisees in those regions, again, we'll factor London's a very competitive market. It's very, very difficult in London for franchisees. They're the areas that are really a focus for us, making sure that we support those franchisees with some good marketing, it's another consideration when we're talking about aggregators as to why that's quite important, because in the London market, it's probably a higher concentration of customers that would typically use that type of platform as opposed to a native one.

Speaker #1: Now, some of those franchisees in those regions, you know, again, we'll that's the London's a very competitive market, very, very difficult in London. For for franchisees.

Speaker #1: So, you know, they're the areas that are really a focus for us, making sure that we support those franchisees with some good marketing. And, you know, it's another consideration when we're talking about aggregators as to why that's quite important.

Speaker #1: Because in the London market, there’s probably a higher concentration of customers who would typically use that type of platform, as opposed to a native one.

Speaker #3: But the way we assess, Wayne, and this is very important, we look at the store, the economics and performance of the store, and then there's a, or who's the franchisee?

Andrew Andrea: The way we assess, Wayne, and this is very important, we look at the store, the economics and performance of the store, and then there's a, all right, who's the franchisee? You're looking at the unit performance, and it so happens one might belong to a bigger franchisee, one might belong to a smaller franchisee. A consistency in how we approach the store challenge is the really important point because it means that regardless of how big or small you are, you're all treated equally when presented with the same challenge.

Speaker #3: So you're looking at the unit performance, and it so happens one might belong to a bigger franchisee, one might belong to a smaller franchisee.

Speaker #3: But consistency in how we approach the store challenge is the really important point, because it means that regardless of how big or small you are, you're all treated equally when presented with the same challenge.

Speaker #4: The others. Back to you, Nicholas.

Anubhav Malhotra: Any others?

Michael Barker: Any others?

Ross Broadfoot: Okay, back to you, Nicola.

Michael Barker: Okay, back to you, Nicola.

Speaker #1: Well, I just wanted to say thank you all very much for making the time and effort to come and talk to us today, and for your questions.

Nicola Frampton: Well, I just wanted to say thank you all very much for making the time and effort to come and talk to us today and for your questions. I hope we've given you the answers to all of them. If there's anything else, I'll point you to Michael. If there's any follow-up questions, he will do his best to make sure that we help you with that. Yeah, thank you.

Speaker #1: Hope we've given you the answers to all of them. But, you know, if there's anything else, I'll point you to Michael. And, you know, if there are any follow-up questions, then, you know, he'll—he will do his best to make sure that we help you.

Ross Broadfoot: Thanks very much.

Andrew Andrea: Thanks very much.

Nicola Frampton: See you all in six months.

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Q2 2026 Domino's Pizza Group PLC Earnings Call - Q&A

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